The only reliable .32 I can think of offhand is the Kel-Tec, but these will sometimes need the feedramp polished and the frame/slide mating surfaces smoothed out a bit in order to run 100%. If you don't mind taking the ten or fifteen minutes to do this, you can have a very reliable backup. There are a few others such as the Seecamp and the Beretta Tomcat, but these can at times be very problematic. The Taurus Millenium and the NAA version iare supposed to be decent, but I've not used one of these.

I have to wonder why you would pick the .32 for these purposes. They don't make good plinkers as they are expensive to feed and will not be very accurate. Some can be found in .380 in the same sized pistol, and .380 is cheaper to shoot and more powerful to boot. Also, some .32's can experience rimlock (it's a semi-rimmed cartridge), which will not happen with a .380. Anyway, not to criticize your choice, but just wanted to post food for thought.

The .32 and .380 aren't really good for moving the kids up. The handguns that use these calibers tend to be rather small, and will often have blowback actions instead of a linkage type. Therefore, although the cartridge isn't greatly powerful, these small pistols still have a pretty stout recoil, especially since there isn't a lot of weight to help absorb recoil. IOW, these guns are for defense use, and therefore do not make good range/target guns.* My wife likes to shoot our many .357's and 9mm's, but she refuses to shoot the KelTec P3AT.

The .22 you already have is a decent choice for the learning of basic marksmanship and trigger skills. Once they are ready, you might consider a steel .38 revolver (or .357mag in which you can use .38's) or a 9mm semi-auto. A 9mm won't be greatly different in recoil over a .380, but they will be cheaper to shoot and will most likely be more accurate as well.

BTw, there are a few larger .32's and .380's such as the tip-up Berettas and the like. However, they are as large as many 9mm's and more expensive to purchase and feed.

PhilR.

*Some people here will interpret this sentence as me saying a .32 cannot be used at the range. They can in fact be used at the range.

I'd strongly consider the Beretta Tomcat. It's a neat little design -a tad heavier than some but very reliable and unique. Get the "inox" (stainless slide) version as it will take a little sweat and humidity better. If I were in the market for a .32, that's what I'd get.

I own and carry a kel-tec P32 on a daily basis and all I can say about it is that it is perfect. It disappears totally and is always with me should I ever need it. Sometimes its a BUG and other times it's all I have with me. I never feel underarmed with it. Rimlock is an issue, but with the .32 cartridge, penetration should be your biggest concern. I opted for this over the .380 because recoil is significantly less, I get one extra round, and the slide locks to the rear after the last round has left the barrel. 100% reliable even before the fluff and buff. I can't say enough good about this little gun. I feel that the distances this gun is used for (arms length) it will stop a BG just fine with a few shots to his chest and/or a few up his nose. I carry it with 2 Cor-Bon 60gr JHPs (one in the tube and one on top of the mag) and the rest Fiocchi 73gr FMJ. I recently bought a second mag for it and I intend on making it my everywhere summer carry gun. I highly reccomend a belt clip for it and get a good pocket holster as well. 95% of the time it is inside my waistband in the appendix carry with the belt clip. draws just fine and this thing is amazingly accurate esp. considering it comes with only the suggestion of sights. great BUG or deep concealment weapon.

I can't believe that no one mentioned the Walther line. I just checked their web site and they list both the PPK and PPK/S at $605 retail.
I have an F.E.G. AP/FN, in .32 acp which is a near copy of the Walther PP. I got it for fun, and it was pretty cheap too. It is a great size to stick in the watch pocket of my jeans.
That said, I agree with some others that a .380 acp is a little more potent, and they come in the same size package as the .32 acp.
As long as I've mentioned F.E.G. they also make a model PA 63 (and variants) in 9x18 Makarov. It, too is the same size frame as the PP. There are plenty of them floating around the internet for sale. They are surplus Com Bloc police guns.

I checked out those walthers. They have a nice look to them. Going by price are these considered the Cream Of The Crop? I have seen the F.E.G on gunbroker they are a lot cheaper also. Is the slide pretty tough to rack......(would my wife be able to pull the slide with out much effort. She had a hard time with the NAA 32.) The frame seems to be longer so maybe its a bit easier to pull. I am seriosly considering one.

I think this inaccurate perception by some is because Seecamp pistols (32 or 380) CAN be a bit ammo sensitive, but once you find the round your particular Seecamp likes, reliability is assured.

My wife and I have three Seecamp pistols (2/32 1/380) and all of them have been 100% reliable with Speer Gold Dot jhp's.

In the past I've owned a Beretta Tomcat, 2 NAA Guardians, and one KelTec P32, and IN MY EXPERIENCE the Seecamp offers as good, if not better, reliability than any of them. The NAA's were actually very reliable, the Tomcat was a pos, and the KelTec was less reliable.